China Called to Assess Bitcoin ETF Impact Amid US Policy Shift, Lou Jiwei Warns
Former Chinese finance minister Lou Jiwei has emphasized the need for China to reassess its stance on cryptocurrency developments. Speaking at the 2024 Tsinghua Wudaokou Chief Economists Forum in Beijing, Lou highlighted the criticality of monitoring developments in the digital currency space, particularly global policy changes such as the USâs decision to approve Bitcoin ETFs. The move marks a significant regulatory shift by the US Securities and Exchange Commission (SEC).
Lou Jiwei highlighted the potential risks that cryptocurrencies pose to global financial stability, particularly in terms of volatility and their use in illicit activities such as money laundering. The former minister stressed that the volatility inherent in digital currencies could cause financial instability and affect broader economic security. He said these risks deserve a thorough review to protect financial systems from potential disruptions.
The former Treasury Secretary highlighted the major transformation of the US in Bitcoin and related financial products. Historically, the US SEC has been resistant to approving Bitcoin ETFs. However, their recent approvals show that cryptocurrencies have a recognized legitimacy and acceptance within traditional financial markets. Lou suggested that Chinese policymakers should carefully monitor and analyze these international policy adjustments.
Despite Chinaâs strict ban on cryptocurrency mining and trading in 2021, the country still controls a significant portion of the Bitcoin mining network. More than 55% of Bitcoinâs hashrate is controlled by Chinese mining pools. However, this dominance is increasingly being challenged.
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